Fact #1: Humans are flawed.
Fact #2: The real estate industry is complex and involves many stakeholders and face-to-face transactions.
As technology advances, the hope is that it will exceed human error and create a more uniform system, so anyone buying or selling a home can do so in a more efficient way. Good news is with the rise of Blockchain, a solution is on the horizon.
You could spend hours online, reading articles and watching YouTube videos on the topic of Blockchain, but for the sake of this post, I will keep it simple and related to real estate.
Think of blockchain as a very sophisticated, digital account book that securely stores massive amounts of sensitive information in one digital place. With the implementation of blockchain, important real estate documents like title records, rental contracts and financial details would not need to stay at the county courthouse or at a brokerage. Instead, they would be stored in a “blockchain” thus creating a more uniform standard of conducting business in the world of real estate.
Before you buy a property, records of the property are manually searched by a title company to make sure there is “good title” (ownership, no liabilities, etc.) of the property. This process is full of excessive regulations and involves stakeholders like lawyers and the government, which ultimately means more money spent over a longer period of time.
With the establishment of Blockchains, experts say the title industry would be replaced by a more condensed system where important documents cannot be tampered with and will be accessible to get a hold of without having to go through a third party.
In this case, instead of having to go to a central intermediary (lawyer, bank, broker for example) to conduct business, Blockchain allows the buyer and the seller to conduct business securely and faster. This also means that by taking out “the middleman” buyers and sellers can save money as they won’t need to pay fees and extra costs accumulated during the transaction.
In essence, Blockchain is predicted to shift the real estate industry away from the traditional client-server system and create a peer-to-peer network, so average people can conduct a huge transaction like buying/selling a home with the same amount of security and transparency large enterprises and the wealthy receive from up top.
While the word “Blockchain” might not be in the most positive headlines in the news today, one thing is certain — it has the potential revolutionize real estate and impact the title industry greatly.
Have more questions about Blockchains and how they will impact you as a buyer or seller? Contact me today.